Larkin v. Insurance Co. of North America

109 Misc. 2d 944, 441 N.Y.S.2d 197, 1981 N.Y. Misc. LEXIS 2497
CourtNew York Supreme Court
DecidedJuly 8, 1981
StatusPublished
Cited by1 cases

This text of 109 Misc. 2d 944 (Larkin v. Insurance Co. of North America) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Larkin v. Insurance Co. of North America, 109 Misc. 2d 944, 441 N.Y.S.2d 197, 1981 N.Y. Misc. LEXIS 2497 (N.Y. Super. Ct. 1981).

Opinion

OPINION OF THE COURT

Howard A. Zeller, J.

Petitioner John Larkin moves pursuant to CPLR articles 75 and 78 for various relief regarding the award of a no-fault arbitrator. Respondent Insurance Company of North America (INA) cross-moves to dismiss the petition pursuant to CPLR 404 and 3211 or, in the alternative, to stay this proceeding pursuant to CPLR 2201.

This proceeding arises out of a dispute over the amount of lost wages that is recoverable by a claimant under no-fault. Section 671 (subd 1, par [b]) of the Insurance Law provides that “[b]asic economic loss” recoverable under no-fault includes loss of earnings up to $1,000 per month; paragraph (a) of subdivision 2 provides that first-party [945]*945benefits include basic economic loss payments less 20% of lost earnings. In Kurcsics v Merchants Mut. Ins. Co. (49 NY2d 451, 457) the Court of Appeals considered “whether the 20% deduction was intended to operate so as to limit recovery for loss of earnings to $800 per month, or whether it was meant to reduce only actual lost earnings claimed, thereby allowing a maximum recovery of $1,000 per month as first-party benefits.” The court concluded (p 458) “that an injured person can recover up to $1,000 per month from the insurance carrier for lost earnings. The statutory scheme envisions nothing less”. The court did not state whether this rule was to be applied retroactively.

The Superintendent of Insurance on May 1, 1980 promulgated the “Fourteenth Amendment to Regulation No. 68”. Inter alia, this amendment provided that for no-fault cases regarding accidents which occurred prior to February 20, 1980 (the date Kurcsics, supra, was decided), arbitrators shall calculate the amount due a claimant using the $800 per month loss of earnings ceiling and insurers shall be liable therefor. Arbitrators shall also calculate loss of earnings using the $1,000 per month ceiling. However, this latter calculation is not a final award. “Pending a further regulation or other directive by the superintendent based on a final court determination of insurers’ and self-insurers’ obligations on accidents arising prior to February 20, 1980, arbitrators and master arbitrators shall have no jurisdiction to make an award for amounts in excess of $800 per month or interest and/or attorney’s fees with respect thereto or to direct that insurers or self-insurers pay any such amounts.” (11 NYCRR 65.18 [b] [2] [ii].)

In a “Statement of Reasons for Emergency Measure”, the superintendent claimed that “no arbitrator or master arbitrator should be put in the position of having to decide with finality an insurer’s or self-insurer’s liability for benefits in excess of $800.00 per month for accidents prior to February 20, 1980. Such arbitration awards would be final and, if inconsistent with an ultimate court determination, this could result in irreparable harm to claimants, insurers or self-insurers depending on the particular arbitrator’s or master arbitrator’s interpretation of the scope of Kurcsics.”

[946]*946Petitioner alleges he was injured as a result of a motor vehicle accident on October 28, 1978, has been unable to work since then, and has sustained a loss of earnings of $1,491 per month. Respondent Insurance Company of North America paid petitioner $800 per month in lost earnings, while petitioner demanded $1,000 per month. An arbitrator decided whether “$1000 should have been paid to claimant from October 28, 1978 to February 27, 1980 instead of the $800 which was paid,” and found that “(a) law passed by the State Legislature is effective from date it says it is and not when an administrative agency says it is unless this power is specifically given to it by the Statute.” Petitioner was awarded $3,200 plus interest and attorney’s fees, as the arbitrator implicitly found that the $1,000 loss of earnings ceiling was proper, and disregarded the Fourteenth Amendment.

Petitioner alleges that by reason of the arbitrator’s decision the arbitrator was removed from the American Arbitration Association’s panel. Petitioner seeks an order staying the consideration of this matter by a master arbitrator, confirming the original arbitrator’s award, in the alternative declaring amendment 14 invalid, directing that if master arbitration proceeds that the master arbitrator not consider the amendment, and prohibiting the superintendent from “any retaliatory action or threat of action, past or future, against any arbitrator or other person for failure to comply with said invalid and illegally promulgated T4th Amendment’.”

Respondent INA claims that petitioner lacks standing to contest the validity of the Fourteenth Amendment. “Whether a person seeking relief is a proper party to request an adjudication is an aspect of justiciability which must be considered at the outset of any litigation. Under traditional theory a party had standing only where he established that his legal rights had been invaded * * * This approach, known as the legal interest’ test has recently been disavowed because it focuses on the issues to be litigated rather than on the party bringing suit * * * The ‘zone of interest’ test was formulated to ascertain the petitioner’s status without necessarily dealing with the merits of the litigation. A petitioner need only show that [947]*947the administrative action will in fact have a harmful effect on the petitioner and that the interest asserted is arguably within the zone of interest to be protected by the statute” (Matter of Dairylea Co-op. v Walkley, 38 NY2d 6, 9).

IN A argues that petitioner lacks standing because the amendment has not been applied to him, its application by a master arbitrator is not assured, and petitioner has suffered no injury. It is true that the Fourteenth Amendment has not caused petitioner a present injury in fact. However, the April, 1981 issue of “New York Arbitration Reports” states that 19 arbitrators were removed from Office for failure to implement 11 NYCRR 65.18, and contains a notice from the superintendent that disregard of any regulations by an arbitrator will result in removal. INA argues nonetheless that the application of 11 NYCRR 65.18 by a master arbitrator is speculative. In light of the superintendent’s actions and warning this argument is strained. Petitioner has shown that the Fourteenth Amendment will have a harmful effect on him and he asserts an interest in arbitration that is within the zone of interest of the Insurance Law and CPLR. It would be a poor utilization of judicial resources to deny standing and have master arbitration proceed, only to have these same ultimate issues before the court again on appeal from the master arbitrator. Petitioner has standing.

A dismissal of the entire petition on the ground it is premature is similarly not warranted. This dispute surrounds a temporary measure which will expire of its own terms, and a dismissal would only prolong the resolution of issues which deserve a more expeditious treatment. The interests of the parties and judicial economy require that the court address the petition.

Petitioner’s motion to stay the appeal to a master arbitrator is made pursuant to CPLR 7503. CPLR 7503 (subd [b]) provides, in part, “a party who has not *** made or been served with an application to compel arbitration, may apply to stay arbitration on the ground that a valid agreement was not made or has not been complied with”. The superintendent argues petitioner has participated in the arbitration process and has lost his right to a stay pursuant to CPLR 7503 (subd [b]).

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Related

In re the Arbitration between Cady & Aetna Life & Casualty Co.
113 Misc. 2d 1080 (New York Supreme Court, 1982)

Cite This Page — Counsel Stack

Bluebook (online)
109 Misc. 2d 944, 441 N.Y.S.2d 197, 1981 N.Y. Misc. LEXIS 2497, Counsel Stack Legal Research, https://law.counselstack.com/opinion/larkin-v-insurance-co-of-north-america-nysupct-1981.